Allianz Global Investors GmbH v. Bank Of America Corporation

Background

Nearly 1,300 investment firms and government entities sued sixteen banks and their affiliates. The plaintiffs alleged that the defendants conspired from approximately 2003 to 2013 to manipulate the foreign-exchange market by coordinating trades, exchanging confidential customer information, manipulating benchmark rates, and inflating bid/ask spreads. They asserted claims under Section 1 of the Sherman Act and for unjust enrichment.

The opinion addressed motions by The Royal Bank of Canada and RBC Capital Markets LLC, which the opinion collectively calls the “Movants.” Royal Bank of Canada sought dismissal for lack of personal jurisdiction, meaning that it argued the court could not require it to defend the case there. Both entities sought dismissal for failure to state a claim, meaning that they argued the complaint did not allege enough facts to support legal relief. The claims against MUFG Bank, Ltd. had already been voluntarily dismissed.

RBC Capital Markets LLC

The court dismissed all claims against RBCCM for failure to state a claim under Rule 12(b)(6). The complaint made general allegations that “RBC,” defined to include Royal Bank of Canada, RBCCM, and their subsidiaries, participated in the conspiracy. But it did not identify specific chats or text messages in which RBCCM traders sought to manipulate benchmark rates or inflate bid/ask spreads.

The court held that this group pleading was insufficient. Although the complaint referred to nearly 300 interbank chats produced in connection with a related settlement, it did not allege that any particular chat involved RBCCM traders or describe the substance of such chats in a way that connected RBCCM to the alleged conspiracy.

Royal Bank of Canada: Personal Jurisdiction

The court denied Royal Bank of Canada’s motion to dismiss for lack of personal jurisdiction. It held that the Third Amended Complaint made a prima facie showing of specific personal jurisdiction. Specific jurisdiction concerns whether the defendant’s forum-related conduct is connected to the lawsuit; it differs from general jurisdiction, which the plaintiffs did not rely on and the court found was not supported by the allegations.

Because the claims arose under a federal statute with nationwide service of process, the court considered Royal Bank of Canada’s contacts with the United States. The court found that the complaint sufficiently alleged: (1) an FX conspiracy; (2) Royal Bank of Canada’s participation; and (3) acts by alleged co-conspirators in the United States that furthered the conspiracy.

The complaint described numerous chats involving Royal Bank of Canada traders, including discussions of benchmark rates, bid/ask spreads, coordinated trades, and a “fix.” Some chats involved traders based in New York from alleged co-conspirators. The court held that these allegations supported jurisdiction through a conspiracy-based theory. It also found jurisdiction reasonable because Royal Bank of Canada allegedly had extensive U.S. FX operations, transactions involving plaintiffs, and suit-related contacts with the United States, while the United States had an interest in resolving alleged antitrust conduct occurring within its borders.

Royal Bank of Canada: Failure to State a Claim

The court denied Royal Bank of Canada’s request to dismiss the antitrust claim as untimely. Although private antitrust claims generally have a four-year limitations period, the court said it could not decide at the pleading stage whether the claim against Royal Bank of Canada was timely. The court reserved the question whether a tolling period from an earlier class action applied to Royal Bank of Canada, which had not been a defendant in that action. The court stated that resolving that issue would be better suited to a later stage after discovery.

The court also allowed the antitrust claims to proceed for plaintiffs whose complaint did not list a specific defendant counterparty. At the pleading stage, the plaintiffs’ allegation that each had relevant FX transactions occurring in the United States, either through the plaintiff or its counterparty operating there, was sufficient. The court noted that details about individual transactions could be obtained during discovery.

The court denied the motion to dismiss the foreign plaintiffs’ antitrust claims under the Foreign Trade Antitrust Improvements Act. It relied on the complaint’s allegation that the relevant transactions occurred in the United States through the plaintiff or its counterparty operating there. The court also denied dismissal of the unjust-enrichment claim, holding that the plaintiffs could plead unjust enrichment as an alternative to their antitrust claims even though they could not obtain double recovery.

Disposition

Judge Lorna G. Schofield ordered that the motion to dismiss be granted as to RBCCM and denied as to Royal Bank of Canada. The opinion does not state that either disposition was with or without prejudice.